MediaTek partners with Google to reach into emerging markets

Taiwanese chipmaker looks elswhere amid sluggish Chinese demand

NIKKI SUN, Nikkei staff writer

Sagar Kamdar of Google, left, and TL Lee of MediaTek

HONG KONG -- Mediatek, the world's second largest mobile chip maker, has teamed up with U.S. tech group Google to offer cheaper, faster smartphones in emerging markets as early as next year amid sluggish demand from mainland China.

The Taiwanese company said on Thursday it had enabled several models of its mobile chips including MT6739, MT6737 and MT6580 to run Google's streamlined operating system Android Oreo (Go edition) in entry-level smartphones.

The lighter version of Android software will allow programs to run 15% faster while occupying half of the storage and burning less data than the older version on devices with memory between 512MB and 1GB, said Sagar Kamar, director of product management of Google's Android department.

The announcement comes a day after its U.S. rival Qualcomm, the world's biggest chip maker, said it will implement the new Google operating system on its mid- and low-tier Snapdragon mobile platform.

Dubbed "the architect of cheap smartphones," MediaTek is known to provide chips to major Chinese smartphone markers such as Huawei Technologies, Oppo, Vivo as well as Samsung Electronics' mid- to low-end mobile devices.

The partnership will enable the Taiwanese chip maker to secure more orders from emerging markets such as India, Latin America, Southeast Asia and Africa amid softer demand from China.

"With Android Oreo Go, we believe we will be able to extend the market size," said TL Lee, general manager at MediaTek's wireless communication unit. He said the company had already got "quite a lot of requests" from manufacturers worldwide, especially in emerging markets.

MediaTek has been struggling with a saturated Chinese market with a high smartphone penetration, and wealthier people are upgrading their devices to high-end models. It also lost market share to Qualcomm, whose new chips are equipped with better technology.

In the July-September quarter, MediaTek's sales dropped 18.8% on the year to 63.65 billion New Taiwan dollars ($2.1 billion), while its net profit plunged more than 35% to NT$5.06 billion.

Lee aims to install Android Oreo Go chips onto smartphones that cost $35-$80. He believed the better user experience will prompt people in developing countries to replace their feature phones with smart devices.

"We have the same vision with Google. The main goal of the project is to get more new users to the digital world, to access to the internet," Lee said.

He also said the company was in talks with some international brands that wished to launch lower-tier smartphones with the Google operating system.

Kamar expected the first batch of smartphones running Android Go system to be delivered in the first quarter of next year. The partnership also signaled deeper collaboration between Google and MediaTek for future products, including smartphones with artificial intelligence chips.

"This is the first time MediaTek worked so close with Google," Lee said. "We started working together on a very early stage." He revealed that both companies had deployed a team of staff working on the project on a daily basis for months before the software's official launch.

"It's like MediaTek and Google are jointly developing [the software]," Kamar said. He added that the two companies will also work closely on future applications of high-end products, such as AI chips.